Accounting (grāmatvedība)

Accounting (grāmatvedība) is the recording of every business transaction of an undertaking in accounting registers, based on source documents, so that its assets, liabilities, financial position and taxes can be seen truly and clearly.

In Latvia it is governed by the Accounting Law, which covers commercial companies, individual merchants, associations, public bodies and individuals carrying out economic activity. Every business transaction must be recorded, and the information must be true, comparable, timely, relevant, understandable and complete.

The head of the undertaking, for an SIA its management board, is responsible for organising the accounts. They are kept by an accountant or a licensed outsourced accountant under a written agreement. Some may keep the books themselves: an individual merchant, an individual carrying out economic activity, or the sole board member of a company who is also its sole shareholder.

The full accounting cycle covers the financial year: opening the accounts, recording transactions, working out balances, closing entries and preparing financial statements. Registers are kept in double entry unless the law allows single entry.